Huang v Ceylan - [2018] NSWSC 306

Supreme Court

New South Wales

Medium Neutral Citation: Huang v Ceylan [2018] NSWSC 306
Hearing dates: 30 January, 9 February 2018; written submissions ending 22 February 2018.
Date of orders: 13 March 2018
Decision date: 13 March 2018
Jurisdiction: Equity
Before: Parker J
Decision:
Declaration that the plaintiffs validly rescinded the contract for the sale of land, between the defendant as vendor, and the plaintiffs as purchasers.

Defendant ordered to take all steps reasonably open to procure return of the deposit paid pursuant to the contract.
Consequential orders for costs.
Catchwords:
CONTRACTS – Conveyancing Act – s 52A(2) – statutory warranties – disclosure of relevant “matter” – where defendant sold plaintiffs a three-bedroom apartment when development consent only permitted two-bedroom apartments – where plaintiffs rescinded contract upon discovery that apartment did not comply with development consent – whether defendant in breach of contract – whether rescission by plaintiffs valid – whether plaintiffs validly forfeited deposit – whether failure to disclose breach of development consent constitutes breach of statutory warranty – breach of development consent is “relevant matter” due to state of building – defendant in breach of contract – plaintiffs validly rescinded contract – deposit not forfeited by plaintiffs – plaintiffs entitled to return of deposit

DEVELOPMENT STANDARDS – State Environmental Planning Policy (Exempt and Complying Development Codes) 2008 – cl 15.1, 2.51 and 2.52 – whether altering media room into third bedroom an exempted development – whether development complies with “development standards”
DEVELOPMENT STANDARDS – State Environmental Planning Policy (Exempt and Complying Development Codes) 2008 – cl 2.52 – where plaintiffs claim insertion of wall into media room is an exempt development because configuration of room remains unchanged – whether cl 2.52 is determinative of whether development is exempt – cl 1.15 – whether development is “specified development” and meets “development standards” – cl 2.51 – development is not a “specified development” – cl 2.52 is not determinative – cl 2.52 is not enlivened
Legislation Cited: Conveyancing Act 1919 (NSW), ss 52A(2), 55(2A)
Conveyancing (Sale of Land) Regulations 2010 (NSW) cls 8, 16(3), Sch 3 Part 1 cl 1(d)
Environmental Planning and Assessment Act 1979 (NSW), ss 121B, 76
Environmental Planning and Assessment Regulation 2000 (NSW), cls 2(d), 43, 45
State Environmental Planning Policy (Exempt and Complying Development Codes) 2008 (NSW) cls 2.51, 2.52, 1.15
Cases Cited: Burwood Council v Ralan Burwood Pty Ltd (No 3) [2014] NSWCA 404
Marinkovic v McGrath Engineering Pty Ltd [2004] NSWSC 571
Category: Principal judgment
Parties: Kai Huang (First Plaintiff)
Zuyi Chen (Second Plaintiff)
Pelin Ceylan (Defendant)
Representation:
Counsel:
P Cutler (Plaintiffs)
B Burke (Defendant)
Solicitors:
Macalester Lawyers (Plaintiffs)
Courtenay & Co Solicitors (Defendant)

File Number(s): 2017/119756
Publication restriction: Nil

Judgment

These proceedings concern a contract for the sale of a residential apartment at Ryde in Sydney. The contract was dated 26 August 2016. The defendant, Pelin Ceylan, was the vendor. The first plaintiff, Kai (known as “Kevin”) Huang and the second plaintiff, Zuyi Chen, were the purchasers. Mr Huang and Ms Chen…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Huang v Ceylan

Details

AGLC: Huang v Ceylan [2018] NSWSC 306
Case: [2018] NSWSC 306
Decision Date: 13 March 2018

CaseChat Overview and Summary

The matter of Huang v Ceylan involved a dispute between the plaintiffs, Mr and Mrs Huang, and the defendant, Mr Ceylan, who sold the plaintiffs a three-bedroom apartment. The Huangs later discovered that the development consent only permitted two-bedroom apartments. Consequently, they rescinded the contract and sought remedies including the return of their deposit. The case was heard in the Supreme Court of New South Wales. The primary legal issues revolved around whether Mr Ceylan breached the statutory warranties under the Conveyancing Act, if the plaintiffs validly rescinded the contract, and if they forfeited their deposit. Additionally, the case examined whether the alteration of a media room into a third bedroom constituted an exempt development under the State Environmental Planning Policy (Exempt and Complying Development Codes) 2008.

The court considered the provisions of the Conveyancing Act, particularly section 52A(2), which requires the disclosure of relevant matters. The court found that Mr Ceylan breached this requirement by not disclosing that the apartment did not comply with the development consent. The court ruled that the breach of development consent was a relevant matter due to the state of the building, thus constituting a breach of statutory warranty. Furthermore, the court held that the plaintiffs validly rescinded the contract upon discovering the breach. The plaintiffs did not forfeit their deposit as they rescinded the contract before the settlement date. The court examined the provisions of the State Environmental Planning Policy, finding that the alteration of the media room did not constitute an exempt development as it did not meet the "development standards" outlined in the policy.

In conclusion, the court found that Mr Ceylan breached the statutory warranties by failing to disclose the breach of development consent. The plaintiffs validly rescinded the contract and did not forfeit their deposit. Consequently, the court ordered Mr Ceylan to return the deposit to the plaintiffs. The plaintiffs were also granted any additional relief they might be entitled to under the Conveyancing Act.

Orders